Explain the study of economics.
What will be an ideal response?
Economics is the study of how people allocate their limited resources in an attempt to satisfy their unlimited wants. Because of this contrast between limited resources and unlimited wants, economics is the study of how people make choices.
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The aggregate expenditure model focuses on the ________ relationship between real spending and ________.
a. short-run; real GDP b. short-run; inflation c. long-run; real GDP d. long-run; inflation
The multiple changes in income and output that results from a change in autonomous expenditure is called the multiplier
Indicate whether the statement is true or false
In the Keynesian model, if aggregate expenditures exceed aggregate output and inventories of firms fall, then the aggregate output and the business sector could be expected to:
a. increase output. b. decrease output. c. decrease investment. d. hire fewer workers.
One reason that some criticized government price regulations was ______________, where the regulated ended up playing a large role in setting the regulations that were intended to control them.
a. regulatory capture b. regulation apprehension c. legal backtreading d. government abandonment